Arctic Oil Drilling

From Petroleum News (Volume 13, Number 22, June 01, 2008), an interesting comparison between environmental regulation of arctic oil drilling in Norway and Alaska.

Protecting Arctic waters off Norway, Alaska

Norway, United States share common goals but use different regulations to limit discharges from drilling in Arctic offshore

Alan Bailey
Petroleum News

The development of oil and gas fields in the Arctic offshore is not a new phenomenon. In the waters of Alaska’s Beaufort Sea, the Northstar and Endicott oil fields have been in production for several years. While, in the Norwegian Barents Sea, the Snøhvit gas field went into operation in 2007, for example.

But with heightened interest in oil and gas exploration on the outer continental shelf in the Arctic regions of both the United States and Norway, what steps are these countries taking to protect the delicate Arctic environment from potential pollution from Arctic drilling operations?

Norway has established a policy of achieving zero discharges from drilling activities, while Alaska’s Northstar field is already a zero discharge facility. The Endicott field only discharges treated domestic wastewater into the sea — produced water and other industrial waste are not discharged.

Ververis permit

According to a report in the Barents Observer, in March the Norwegian Pollution Control Authority categorized StatoilHydro’s Ververis exploration well, about 120 miles offshore in the Barents Sea, as being in “the green and yellow group.” That categorization means that “the operation will be without effects on the environment in the area,” the Barents Observer said.

Gro Øfjord, senior executive officer of the Norwegian Pollution Control Authority, told Petroleum News April 19 that the “green and yellow” reference denotes the types of chemicals permitted for use on the drilling rig. The Norwegian regulations require a drilling operator to classify chemicals into four categories: black, red, yellow and green, Øfjord said.

Green category chemicals are specified on a list maintained by the Convention for the Protection of the Marine Environment of the North-East Atlantic (known as the OSPAR Convention). These chemical have been determined to be non-toxic. Yellow category chemicals are not on the OSPAR list but have toxicity below a specified level.

Øfjord also said that Norwegian drilling regulations are stricter for the Barents Sea than elsewhere on the Norwegian continental shelf, especially in environmentally sensitive areas and areas near the coast. For example, in the Barents Sea there are especially stringent regulations for disposal of drilling mud, the material that is used to maintain well pressure and remove rock cuttings during drilling operations.

“In the Barents Sea … the operator can discharge drilling mud from the top hole, but not for the lower sections of the well when drilling,” Øfjord said.

U.S. regulation

On the U.S. continental shelf, the Environmental Protection Agency regulates discharges from drilling operations through the National Pollutant Discharge Elimination System, generally known as NPDES. EPA regulates 14 distinct waste streams, Jeff Walker, U.S. Minerals Management Service regulatory supervisor, Alaska field operations, told Petroleum News May 12. Those waste streams include drilling mud and rock cuttings, as well as produced water from oil production.

General federal guidelines for offshore discharges apply to the whole of the United States continental shelf, Dianne Soderlund, EPA program manager for the Alaska oil and gas sector, told Petroleum News May 27. However, all discharges need to be permitted and the permit stipulations may differ from the guidelines, depending on circumstances.

“There’s always the latitude that a permit could become more stringent depending on local conditions,” Soderlund said.

The guidelines state that the discharge of drilling mud and rock cuttings can be permitted for offshore exploration drilling activities, Soderlund said. That position is based on a view that the impacts of discharges from exploration operations are relatively minor, she said. But for fields in state waters within three miles of the coastline the guidelines do ban the discharge of mud, cuttings and produced water during field development and operation (the general NPDES permit for oil and gas operations in the Cook Inlet region of Alaska includes an exemption to this requirement).

The federal guidelines sanction the discharge of mud, cuttings and produced water during field development and production in federal waters outside the three-mile limit, Soderlund said. However, there has been a trend towards drilling disposal wells to inject waste material into the subsurface, she said.

The Oooguruk field that will go into production later this year in state waters offshore the central North Slope uses a special injection well for disposing drilling waste.

And EPA imposes strict effluent limits on anything discharged into the ocean. For the regulation of disposed drilling mud, the agency has moved from the use of lists of approved chemicals to the requirement for toxicity testing, Soderlund said. Before the commencement of drilling, the operator has to test the drilling mud using a proscribed procedure to determine whether the mud material meets regulatory standards for disposal.

Arctic permitting

So, how does all of this translate into regulation of drilling in the U.S. Arctic waters of the Beaufort and Chukchi Seas?

EPA currently has a general NPDES permit for exploration drilling in the Beaufort and Chukchi — a company can obtain authorization to operate within the stipulations of the general permit without having to obtain an individual permit for a specific activity.

The general permit allows the offshore disposal of exploration drilling waste, subject to the mud toxicity testing requirements. However, the disposal of drilling cuttings and mud is banned in some environmentally sensitive areas, such as the Steffansson Sound Boulder Patch near the mouth of the Sagavanirktok River.

And the permit requires an operator to document a best management practices plan to specify how discharges will be minimized, Walker said.

There is no current general permit for field development and production in the U.S. Arctic offshore, Soderlund said. And given the likely small number of development projects, it’s probable that new development projects would have to operate under individual NPDES permits rather than a general permit, she said.

Public review

However, the development of either a general permit or an individual permit requires a public review process. The conditions within a permit beyond those stipulated in promulgated effluent guidelines will depend on input received from the public, tribal governments and from consultations between EPA and the National Marine Fisheries Service and the U.S. Fish and Wildlife Service, Soderlund said. EPA also works closely with the State of Alaska to ensure that a permit meets the requirements of state water quality standards, she said.

So, how do the regulatory regimes of Norway and the United States compare when it comes to offshore Arctic drilling?

Walker sees both countries promoting a partnering relationship between industry and the regulators to reduce discharges. And although the regulations for drilling discharges differ between the two countries, it’s also clear that the two countries share common objectives in preventing environmental damage.

“My general conclusion is that both systems are very robust,” Walker said. “… Both regulatory regimes seek to minimize discharges and seek to regulate discharges and minimize environmental impact.”

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